GlossaryEN1 min readUpdated: Jun 22, 2026
Preferential Trade Agreement
Countries and trading blocs conclude preferential trade agreements to improve reciprocal market access by committing to reduce or eliminate tariffs on defined product categories.
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Source: https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/what-is-common-customs-tariff/preferential-arrangements_en
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Definition & Explanation
Countries and trading blocs conclude preferential trade agreements to improve reciprocal market access by committing to reduce or eliminate tariffs on defined product categories. Agreements may be bilateral or multilateral and are legally binding on all signatories; well-known examples include CETA, various EFTA agreements, and the EU's network of association agreements. Exporters benefit from lower import duties in the partner market – but only when accompanied by valid proof of preferential origin, typically a movement certificate or an origin declaration. A preferential trade agreement differs from a customs union in that each party retains its own external tariff policy.
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